Once again, the Medicare reimbursement crisis has turned into an exercise in brinkmanship that physicians would rather do without. However, they may yet escape a dreaded 21% Medicare pay cut next month.

Yesterday, in a rare display of bipartisanship, the House overwhelmingly approved a bill that repeals Medicare’s sustainable growth rate (SGR) formula for physician pay and moves the program eventually from fee-for-service to pay-for-performance. That bill, which President Barack Obama said he is eager to sign, would avert a SGR-triggered pay cut of 21% for physicians that is set for Wednesday, April 1. It also would extend funding for the Children’s Health Insurance Program for 2 more years.

Earlier today, however, Senate Majority Leader Mitch McConnell (R-KY) said the Senate will not vote on the SGR repeal bill until after it returns from an Easter-Passover break on Monday, April 13. McConnell said the Senate would make the legislation its first order of business.

“I think there’s every reason to believe it’s going to pass the Senate by a very large majority,” Reuters quoted McConnell as saying.

The decision to schedule a vote in April, which organized medicine had anticipated as a possibility, allows the 21% pay cut technically to take effect on April 1. It will apply to claims for all services rendered after March 31. However, physicians will not experience this big axe if the Senate approves the repeal bill and the president signs it by April 14. This new deadline arises from how the Centers for Medicare & Medicaid Services (CMS) pays Medicare claims.

By law, CMS and its claims processing contractors cannot pay clean electronic claims any sooner than 14 calendar days after receipt (29 days for hard copy claims). Accordingly, the Senate has until April 14 to approve the SGR repeal bill before CMS begins applying the 21% rate reduction to claims for services rendered on April 1 and beyond. In a best-case scenario, the Senate beats its deadline and all those April claims get paid at the rates in effect before April 1. Under the bill, Medicare rates would be frozen at their current levels until July 1, when they would bump up 0.5% for the remainder of 2015, with annual 0.5% increases from 2016 through 2019.

McConnell said he is counting on this 14-day claims processing window to spare physicians the ill effects of the 21% cut, according to Reuters.

Moans of Frustration From Organized Medicine

Congress has postponed SGR-triggered pay cuts for physicians 17 times since 2003, usually at the last minute. McConnell’s decision to let the 21% cut kick in and then undo it retroactively in mid-April set off moans of frustration in organized medicine.

The American College of Physicians said it was “greatly disappointed.”

“By not passing the bill, the Senate failed to join the House in enacting legislation to achieve historic reforms in physician payment while making other needed healthcare improvements,” American College of Physicians President David Fleming, MD, said today in a news release.

Robert Wergin, MD, president of the American Academy of Family Physicians, told Medscape Medical News he was “disappointed, but not discouraged.”

“The House vote (392 to 37) showed strong support — stronger than we anticipated — for a bill that ensures healthcare access for the elderly, the disabled, and children,” said Dr Wergin. “It’s got the right mix for a bipartisan agreement [in the Senate].”

Democrats and Republicans alike in the Senate generally agree that Medicare’s SGR formula, designed to curb spending, should be replaced. However, some Senate Democrats would like to extend the life of the Children’s Health Insurance Program for 4 years, instead of 2, and to remove language in the bill that restricts the use of federal funds for abortions. In addition, in a recent opinion-editorial piece published in Politico, Sen. Ben Sasse (R-NE) objected to how the legislation would increase the federal deficit by $141 billion, and other fiscally conservative Senate Republicans may rally around that position as well.

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